AN ORDINANCE GRANTING TO KANSAS GAS AND ELECTRIC COMPANY, A WHOLLY OWNED SUBSIDIARY OF WESTERN RESOURCES, INC., A KANSAS CORPORATION, ITS SUCCESSORS AND ASSIGNS, AN ELECTRIC ENERGY FRANCHISE, PRESCRIBING THE TERMS AND CONDITIONS THEREOF AND RELATING THERETO, AND REPEALING ALL OTHER ORDINANCES AND PARTS OF ORDINANCES IN CONFLICT THEREWITH.

SECTION 1 – DEFINITIONS. For the purpose of this Franchise Ordinance the following terms, phrases, words and their derivations shall have the meaning given herein below:

a)    “KCC” is the Kansas Corporation Commission.

b)    “KGE” is Kansas Gas and Electric Company, a wholly owned subsidiary of Western Resources, Inc., a Kansas corporation.

c)    “City” is the City of Frontenac, Kansas, a municipal corporation operating under the laws of the State of Kansas.

d)    “Person” is any person, firm, partnership, association, corporation, company or organization of any kind.

e)    “Electrical Energy Distribution System” or “EEDS” shall mean all of the lines, poles, meters, transformers, substations, street lights, control systems, and any other physical or operational element used for the purpose of providing electrical energy to residential, business, industrial or any other consumer within the boundaries of the City.

f)     “Gross Receipts” shall mean gross cash receipts derived from the sale of electrical energy within the corporate boundaries of the City through KGE’s EEDS. Gross cash receipts shall exclude revenue from delayed payment charges, connection fees, disconnection fees, reconnection fees, collection fees, returned check charges or other revenues not related to the sale of electrical energy.

When not inconsistent with the context, words used in the present tense include the future; words in the plural number include the singular number and words in the singular number include the plural number. The word “shall” is always mandatory and not merely directory.

SECTION 2 – GRANT OF NON-EXCLUSIVE FRANCHISE TO KGE. KGE is hereby granted the non-exclusive right to acquire, construct, reconstruct, operate and maintain an electrical energy distribution system on, through, along, under and over the streets, highways, easements, rights-of-way, and other public places of the City of Frontenac. This franchise acknowledges the right of KGE to erect, construct or install any necessary facilities for its own exclusive use and its right to make such contracts as it deems necessary and proper for its operations under this franchise including its right to negotiate with those public utilities and service corporations already holding franchises from the City of Frontenac for permission to use existing utility poles and facilities for KGE’s lines and appurtenances. The City’ reserves the right of reasonable regulation of the erection, construction or installation of any facilities by KGE and to reasonably designate where such facilities are to be placed within the public ways and places. All transmission and distribution structures, lines and equipment erected by KGE in the City shall be reasonably located consistent with the proper use of streets, alleys and other public ways and places, and with reasonable convenience of property owners who adjoin any of the said streets, alleys or other public ways and places. Upon the City providing necessary road rights of way at no cost to KGE, KGE agrees that it will, at its expense or in accord with policies established by KGE and/or the KCC, remove and/or relocate poles, wires, and other fixtures which are or may be located on, over or under public road right of way when such removal or relocation is required to serve the transportation needs of the public. Other relocations over public lands will be made and the cost allocated in accord with policies established by KGE and/or the KCC.

SECTION 3 – CONSTRUCTION STANDARDS. All work performed in the construction, operation, maintenance and repair of the EEDS shall be performed in accordance with industry standards, all applicable federal and state laws and regulations, ordinances, local laws and regulations and the National Electric Safety Code. Any property damaged or destroyed by KGE shall be repaired or replaced by KGE and reasonably restored to an equal or better condition than existed prior to the damage. Any pavements, sidewalks or curbing taken up or any and all excavations made by KGE shall be done in a reasonable manner and shall be replaced and repaired at KGE’s expense to an equal or better condition than existed prior to the damage, such work to be accomplished in as expeditious and safe a manner as reasonable. KGE shall not place poles or other fixtures where the same will interfere with any gas, cable or telephone fixtures, water hydrants or mains nor where they might interfere with safe and convenient travel on the City’s streets, alleys and public ways. KGE shall have the authority to trim trees upon and overhanging all streets, alleys, easements, sidewalks and other public places so as to prevent the branches of such trees from coming into contact with its facilities or with KGE’s access to such facilities.

SECTION 4 – INDEMNIFICATION. KGE shall at all times defend, indemnify and hold harmless the City and the individual members of the City’s Governing Body from any and all actions, suits, damages, costs, charges or expenses resulting from the construction, reconstruction, location, maintenance or operation of its EEDS in the City. KGE acknowledges that it is self insured and that it will maintain sufficient reserves to cover exposures.

SECTION 5 – FRANCHISE FEE. That in consideration of the franchise and privilege hereby granted and in lieu of all occupation and license taxes, KGE each month shall remit two percent 2% of its gross monthly receipts, as defined in Section 1 (F) hereof, derived from the operation of the EED in the City of Frontenac The aforesaid payments shall be made to the City of Frontenac, without demand, no later than the last day of the month following the month in which the receipts upon which the franchise fee is based are received.

SECTION 6 – BOOKS AND RECORDS. The Company shall provide the City or City audit representatives with reasonable access to Company records and information documenting the total gross receipts from sales within the City. In addition, the following records and reports shall be provided to the City upon request.

a)    A copy of rules, regulations, terms and conditions adopted by KGE that affect the City or KGE’s customers in the City.

b)    A copy of KGE’s current schedule of rates and service charges applicable to the customers in the City.

SECTION. 7 – RESERVATION OF RIGHTS. The City reserves the right to adopt, in addition to the provisions contained in the franchise agreement and existing applicable ordinances, such additional regulations as it shall find necessary in the exercise of its police power; provided, however, that such regulations shall be reasonable and not materially in conflict with the rights and privileges granted in the agreement or with any applicable provision of federal law or regulation.

SECTION 8 – TERM. This agreement shall be for a period of twenty (20) years from and after the effective date as specified below. Renewal of the franchise authority provided by this agreement shall be subject to renegotiation of the parties and shall be governed by applicable state laws and federal regulations. In the event KGE’s customers served within the area covered by this Agreement are granted the right to purchase electricity from a provider other than KGE, either the City or KGE may, upon thirty (30) days’ written notice to the other party, but no later than six (6) months after such grant is effective, request that the franchise fee rate provided for herein be adjusted to reflect the modifications and resolutions of franchise fee issues adopted in the legislation which created the right of customers to obtain electricity from providers other than the Company. The parties agree that, upon the giving and receipt of such notice, they will meet and negotiate in good faith any necessary changes to this Agreement. However, if the parties are unable to reach an agreement within ninety (90) days after the receipt of notice by the receiving party, either party may terminate this franchise. The Company may terminate by giving written notice to the City; the City may exercise its option to terminate the franchise granted to the Grantee by action of the governing body repealing this Ordinance.

SECTION 9 – GOVERNING LAW. This franchise is granted pursuant to the provisions of K.S.A. 12-2001 et. seq. and shall be governed by the laws of the State of Kansas.

SECTION 10 – SEPARABILITY. If any section, subsection, sentence, clause, phrase, or portion of this franchise agreement is for any reason held invalid by any court or agency of competent jurisdiction, such portion shall be deemed a separate, distinct and independent provision and such holding shall not affect the validity of the remaining portions of the franchise agreement.

SECTION 11 – PRIOR ORDINANCE. All ordinances and parts of ordinances in conflict herewith are hereby repealed as of the effective date of this Ordinance.

SECTION 12 – EFFECTIVE DATE. This ordinance shall take effect and be in force after sixty (60) days after its final passage by the City Commission, its publication in the official paper of said City and upon receipt of written unconditional acceptance of the terms of the ordinance by KGE, which acceptance shall be filed with the City Clerk of Frontenac, Kansas, within sixty (60) days of approval of this ordinance by the Governing Body of the City.

SECTION 13 – SUCCESSORS AND ASSIGNS. All provisions of this Ordinance shall be binding upon the City and KGE and upon their successors, lessees and assigns. The rights, benefits and privileges as well as the obligations, duties and liabilities created by this Ordinance shall pass to such successors, lessees and assigns and be binding upon them.

SECTION 14 – ASSIGNABILITY AND RELEASE. A franchise shall be assignable only in accordance with the laws of the State of Kansas, as the same may exist at the time when any assignment is made, provided, however, that the franchise may be assigned by Company without action by the City to any creditworthy entity which succeeds to all or substantially all of the electric utility business of the Company. In the event of such assignment to a successor, Company shall be released from all obligations which are assumption of the franchise being assigned.

(07-07-2000)